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Has Microsoft Lost It's Mojo?

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Has Microsoft Lost It's Mojo?

Post by Mojo on Tue Sep 24, 2013 12:55 am

I just read a fascinating article at Vanity Fair about Microsoft's problems in the last 10 years or so.  The article (http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer) talks about the departure of Gates as CEO and the tenure of Steve Ballmer, Gates' replacement. 
 
Ballmer got his start with Microsoft through his friendship with Bill Gates.  They were at Harvard together and Gates pushed for hiring Ballmer to run the day to day operations at Microsoft to free him and Paul Allen up to focus on product development.  This worked out well for several years as Ballmer was well skilled to the job of operations and was responsible for much of the business side of their success.  The article focuses on Ballmer's reign as CEO and how a non tech guy really stifled their development of new technologies through infighting and red tape. The article ends with a sobering look at a company that many people think is going the way of the dodo.
 
I'll be the 1st to admit that Ballmer as CEO has been a horrible fit.  In Ballmer, you have a guy who is at home in a corporate structure with suits and lawyers.  He's the very definition of an "old school" type of businessman and frankly that is the opposite of what Microsoft is and should be.  Microsoft was founded by 2 nerds who figured out a way to monopolize on the then new personal computer industry.  In the early days, there were no suits or lawyers but rather a group of talented kids just doing what they loved doing, which was finding cool things to do with computers.  Microsoft's 1st headquarters in Albuquerque was in a rat trap motel surrounded by pimps and hookers.  To sum up, they were the last company you would treat like a normal corporation and yet when Ballmer became CEO, that's exactly what he did.
 
With that said, the question becomes has Microsoft lost it's Mojo?  I wouldn't count them out of the game yet.  Yes they have made terrible mistakes with coming in late to far too many innovations.  Apple is killing them in the tablet and smart phone category.  Apple has already destroyed them in the MP3 market and is closing in on their dominance of the desktop operating system.  You add Google to mix with their operating system and online Docs and it would seem MS has a real struggle on their part.
 
I think there are 3 key areas though where Microsoft still has a shot to revitalize the company provided they don't screw it up. 
 
First is the Windows Operating System.  I'll admit it straight up that I hate Windows 8.  They seem hell bent to make the operating system on computers and phones look and act alike and while I can see where that would help them, it can also hurt them as they are very different entities and thus are used in very different ways.  That said, few can argue that Windows 8 is not their best operating system to date when it comes to design, safety, and functionality.  Another thing that gives me some hope also is Microsoft seems to be finally listening to their customers for the 1st time in a long time also.  When people complained about the loss of the start bar and their difficulty navigating the OS, Microsoft responded by coming out with Windows 8.1 and fixing those concerns.  I take those actions as a big plus.
 
Second is their answer to the tablet also known as Surface.  Microsoft has spent a ton of money on this system and unlike Zune or their foray into satellite, the DishPlayer, Microsoft seems to be in it for the long run. Whether it will be able to compete with Google's Chromebooks remains to be seen but the fact that it seems committed to it is promising.
 
Third, and this may be the one that really pays off for them, is the new Xbox One game system scheduled to be released this year.  While it specs are roughly not equivalent to the new Playstation coming out and the price tag is $100 more, Microsoft is moving more and more towards digital content and eventual cable and satellite replacement.  I believe the future is streaming tv and MS seems to be looking at it as their future also.  Apple has played around with it without great success and Netflix has had problems signing deals for content that has kept them somewhat stagnant.  Microsoft has a big advantage in that they have a lot more cache in Hollywood than Apple or Netflix because of their past dealings with Hollywood.  If they can capitalize on this cache through licensing deals with major movie labels and cable channels, they could dominate the market.  They could also conceivably turn an eye towards a company like Roku and acquire them to further spread their dominance in this area.  I really believe this could be a game changer for Microsoft.
 
In order for this to happen though Microsoft needs to restructure and maybe fall back a little more on their roots.  First and foremost, they need a CEO that has an understanding of technology and the innovation to act on that.  Ballmer may be a good numbers guy but he has shown that profits outweigh everything else.  If MS doesn't push him out of the CEO chair soon, they may a day late and dollar short in their endeavors.
 
What do you think about this?  As always, I want to hear your opinions about this.  Just remember to keep things friendly as we're here to learn and teach and not bolster egos.Wink
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